Grayscale Investments is reportedly in talks with JPMorgan and Goldman Sachs about them acting as authorized participants for its proposed spot Bitcoin ETF.
Crypto asset manager Grayscale Investments is reportedly in talks with firms including
JPMorgan and Goldman Sachs about a potential role in its proposed spot Bitcoin ETF.
Bloomberg reported on Jan. 4 that Grayscale had held talks with both investment banks for the
role, citing sources familiar with the matter. It comes less than a week after Grayscale filed an
amended S-3 application with the SEC but didn’t list any authorized participants.
Meanwhile, an earlier media report also suggests Goldman Sachs is also in discussion with
BlackRock to act as an authorized participant for its own respective ETF, citing sources familiar with the matter.
Blackrock previously amended its S-1 filing to name quantitative trading firm Jane Street and JPMorgan as authorized participants in its proposed ETF.
An authorized participant plays a key role in managing an ETF,
as it facilitates the creation and redemption of shares in the fund. An ETF issuer can name multiple financial firms to act as an authorized participant.
Notably, ETF applicants aren’t required to name their authorized participants in their respective S-1 or S-3 filings, meaning that other financial firms still have a window to come on board.
While JPMorgan has already been named as an authorized participant for several proposed spot
Bitcoin ETFs, Goldman Sachs could potentially join other Wall Street giants,
including Cantor Fitzgerald and quantitative trading firm Jane Street, that have been given an authorized participant role for various issuers.
Goldman Sachs has historically held a neutral stance towards cryptocurrencies and
the digital asset sector. In a Dec. 27 interview with Fox Business, Goldman’s head of digital assets Matthew
McDermott said that a Bitcoin ETF approval will help the crypto market mature and invite increased institutional investment into digital assets more broadly.
A spot Bitcoin ETF has never been approved in the United States. However, ETF analysts are pegging the likelihood of approval at 90% before Jan. 10 this year.
There are currently 14 asset managers looking to issue a spot Bitcoin ETF,
an investment vehicle that would provide institutional investors with direct and regulated exposure to Bitcoin in the United States.